Charlotte Business Valuation & Protection Attorneys
Dividing business assets in a North Carolina divorce
During a divorce, the spouses typically go through an equitable division of property and assets. However, when one or both of the spouses own a business, the process becomes a bit more complicated. Because businesses founded during a marriage are just like any other marital property, they must be divided equitably.
Your business must be assigned a value for purposes of a financial division, which can be done in any number of ways. Regardless of how you choose to do it, it’s imperative you secure the help of a professional to ensure your rights remain protected. The high net worth divorce attorneys at Epperson Law Group, PLLC in Charlotte have decades of experience in business valuation and protection, and are ready to put that experience to work for you. Contact us today for a consultation.
What is business valuation? How does it work in Charlotte?
Under North Carolina’s equitable distribution laws (G.S. Chapter 50-20), the court evaluates the value of all marital property as of the date of your separation. If you or your spouse owns a business that counts as marital property, then it’s eligible for business valuation. Depending on the type of business you and your spouse owns or otherwise has an interest in, it’s wise to retain the services of a professional business valuator (also called an appraiser) to determine the fair market value of your business.
A thorough business valuation can help ensure your marital assets are divided in a fair and equitable manner. When a divorce involves issues of spousal support and child support, business expenses and income may need to be considered as part of a spouse’s income. Our business valuation attorneys work with a network of professional business appraisers, valuators and accountants to ensure you are always getting the full financial picture.
How will my divorce affect my Charlotte business? How do I protect it?
When spouses who own an interest in a business are facing divorce, dividing assets can quickly become complicated, as both spouses may want to keep the business intact even after their marital split. In cases like these, you and your spouse have a few options:
- One spouse may buy out the other with cash, or an increase in marital assets or spousal support
- The pair may continue to co-own the business, if they can maintain an amicable relationship (in cases like this, it’s important to review and amend your existing contract)
Some business-owning spouses may take extreme – and fraudulent – measures to protect their company by attempting to hide their assets. If you suspect such behavior, talk to our high net worth divorce attorneys today.
The best and safest way to keep your business protected in the event of a divorce is by creating a pre-marital or post-marital agreement. These types of agreements specify, among other things, what will happen to your business if you and your spouse get divorced. You may also be able to settle these issues with a detailed separation agreement. Our divorce attorneys can provide experienced guidance on what solution may be right for you.
How do I determine the value of my business?
If you’re in the middle of a high-asset divorce, we don’t recommend trying to determine the value of your marital business on your own. It’s best to take advantage of the expertise of professionals like business appraisers or accountants. Typically, you and your attorney will use methods like the following to prove the true value of your business.
This is a very common way to determine the value of a business. Experts look at previous and current sales, cash flow and projected future earnings. They’ll also analyze growth and depreciation possibilities. Through this analysis of potential risk and reward, you’ll get a complete look at your business’s past, present and future – and a complete understanding of its total value.
In a market approach, an appraiser compares your business to similar businesses, considering aspects like future viability and prospects, as well as things like the role of your business in the local community and your prices in comparison to like businesses. If you and your spouse are planning on selling your business during your divorce, this is a good approach to take.
In its simplest form, the asset approach is subtracting a business’s liabilities from its assets. The result is the business’s value. Although this does indeed sound simple, the asset approach can become complicated, as it leaves no room for analyzing any unrecorded assets and liabilities like intellectual property and goodwill – which can often be extremely valuable. This approach typically works best for small businesses with few variables and intangible assets.
How do you determine fair market value in Charlotte?
Our North Carolina business valuation experts use a number of different factors to determine fair market value, including:
- Type of business and its history
- Potential future earnings
- Stock value and financial condition of the company
- Intangible value or goodwill (earnings in excess of the normal rate of return)
- General economic outlook as well as the specific industry outlook
Any divorce that involves valuing and distributing a business is sure to have lots of moving parts. Ensure you protect your financial interests with a seasoned attorney.
Experienced Charlotte business valuation and protection law firm
If your family business is at stake in your divorce, talk to the attorneys at Epperson Law Group, PLLC. Our divorce attorneys can work with you in all aspects of business valuation, ensuring your interests are protected and helping you obtain the best possible outcome for your case. You’ll find our offices right off Exit 57 from I-485. To reserve a consultation with one of our lawyers in Charlotte, Boone, or Weddington, please call 704-321-0031 or fill out our contact form.